Oil Tumbled for a Second Day as IEA Warned Prices Above 100 is Detrimental to Demand

13 April 2011 13 April 2011

BonTrade

Commodities slumped for a second consecutive day after the International Energy Agency (IEA) said that oil prices above $100/bbl would hurt economy. In the energy complex, the front-month contract for WTI crude oil tumbled to a 2-week low of 105.47 before settling at 106.25, down -3.34%, while the equivalent contract for Brent crude plummeted to a 1-week low of 120 before ending the day at 120.92, down -2.47%. Heating oil, gasoline and natural gas also recorded losses. Gold plunged as driven by the broad-based decline in the commodity sector. Risk aversion triggered profit-taking in the sector (as well as in stock markets) and increased demand for bonds. 10-year US Treasury yields fell to 3.50% from 3.59% the previous day.